For PSB employees, stock may be an option; decision on proposal likely after elections

A government official told ET that discussions were preliminary and any decision on the proposal would be taken after polls.

"Bankers informed us that they had appointed consultancy firm Deloitte to give them suggestions on this matter…We will wait for banks to come up with a structured framework and then discuss it further," the official said.

The framework would consider various factors impacting staterun banks with employee ESOPs being a longstanding demand of PSBs. They believe this will help them attract and retain talent amid intense competition from private lenders.

Experts opine that stock options have a proven track record in the private economy space and could offer similar benefits to the PSU ecosystem as well.

The government had held some discussions on the ESOP issue in 2020, but the proposal did not gain traction. The same year, the Economic Survey also made a case for giving ESOPs to , saying it would enable them to become owners of the banks and incentivise them to embrace risk-taking and innovation.

In 2015, the government’s Indradhanush framework for transforming PSBs also recommended ESOPs for the top management.

The previous UPA government had in 2013 allowed PSBs to offer shares to employees at a discounted price under the Employee Share Purchase Scheme. In the last few years, most lenders offered this option to their employees, but it failed to garner much interest.